CHINESE TECH FIRM LOOKS TO AUSTRALIA FOR 'CUTTING EDGE' IDEAS
26 June 2017, Written by David Simmons
CHINESE ed-tech company Retech Technologies (ASX: RTE) has listed on the ASX after raising $17.9 million from its IPO, as it looks to expand its education products through Australia.
As one of the largest online corporate training providers in China, a country with a population of 1.4 billion people, it may seem odd for Retech to single out Australia as a room for expansion.
However, co-chair of Retech, Calvin Cheng, says that while listing in Australia might not mean big money, it will give them returns in other ways.
"Australia's second largest export is actually training and education and Australia has a very remarkable reputation in this industry all over the Asia Pacific," says Cheng.
"As a tech company that digitises content for training we are always looking out for strong intellectual property and Australia is a natural place for us to look."
The company's listing is less about massive sales, and more about the quality of exports Australia can produce.
"In terms of sales, you would imagine China is big enough," says Cheng.
"One of our clients has 1.1 million employees, and if it were a city it would be the sixth largest city in Australia.
"In terms of expanding sales, it might not make logical sense, but we would try to acquire companies outside of China that have cutting edge technologies or methodologies that we could then bring back to China."
The listing, which was backed by giant international players like Alibaba's James Sheng and online & mobile game entrepreneur Wang Yue, will assist Retech's expansion into Australia where it plans to partner with leading training and educational organisations in the country.
Retech has already entered into a Memorandum of Understanding with Queensland TAFE, but Cheng hopes their listing will allow their presence to expand.
"We have a MOU with TAFE Queensland which we are waiting to convert into an actual contract after we list, but we've also been talking to universities and a lot of private training companies," says Cheng.
Whilst the IPO attracted major international investors Cheng says there was a lack of interest from Australian investors, who he says are disillusioned by their previous experiences with other uncommunicative Chinese companies.
"I think quite a few of the companies that have listed in Australia from China, they haven't done well," says Cheng.
"They do not have an operational reason for listing in Australia, unlike us, and they have merely treated the ASX as a financial market. They've raised the money and they have not actually kept in touch with the Australian investment community.
"We are very different because we actually have an operational reason to be here and we will be working very closely with Australian institutions that are well known to most Australians. I hope that will be something which will set us apart from the rest of the Chinese companies."
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Author: David Simmons